In December 1780, Great Britain declared war on the Dutch Republic, drawing it militarily into the American War of Independence.[4] The Dutch had for many years been supplying the Americans, and shipping French supplies to the Americans, in support of the American war effort.[5] The opening of hostilities with the Dutch meant that Britain's trade with countries on the Baltic Sea (where key supplies of lumber for naval construction were purchased) was potentially at risk, and that the British had to increase protection of their shipping in the North Sea. In order to accomplish this, the British began blockading the Dutch coast to monitor and intercept any significant attempts to send shipping into or out of Dutch ports, and began to protect merchant shipping convoys with armed vessels.

The Dutch were politically in turmoil, and were consequently unable to mount any sort of effective actions against the British.[6] The result of this inaction was the collapse of their economically important trade.[7] It was finally decided that a merchant fleet had to be launched. On 1 August 1781, Admiral Johan Zoutman led a fleet of some 70 merchantmen from the Texel, protected by seven ships of the line as well as a number of frigates and smaller armed vessels.

Admiral Hyde Parker was accompanying a convoy of ships from the Baltic when he spotted the sails of the Dutch fleet on the morning of 5 August. He immediately despatched his convoy toward the English coast, and ordered his line to give chase. Zoutman, whose ships had been interspersed with the merchantmen, signalled his line to form in between Parker and the convoy.

The ships of Parker's fleet were not in the best of condition, since great demands were placed on the Royal Navy by the demands of the war, and all manner of ships were pressed into service, or did not receive necessary maintenance. Some ships were in such poor condition that the number of guns available to fire was reduced from its normal complement. In spite of this, Berwick and Parker's flagship Fortitude, both 74 guns, were both relatively new and in good shape. The Dutch fleet had not seen any significant action due to the British blockade.

With a calm sea and a breeze from the northeast, Zoutman maneuvered his line onto a port tack, heading east-southeast, and awaited Parker, who held the weather gage. The British fleet closed, raggedly at first due to the poor condition of some of the ships. When Parker raised the battle flag shortly before 8 am, the two fleets were about half a musket shot apart. Zoutman then also raised his flag, and opened fire, raking the Fortitude with a broadside. Close action ensued, lasting for more than three hours. Around mid-morning the Dutch merchantmen moved away from the action and headed back to the Texel. Around 11 am Parker gave the signal to reform his line, which reformed and limped away from the Dutch.

Casualties on both sides were high, considering the number of ships involved. (Fewer casualties were suffered, for example, in the Battle of the Chesapeake, fought a month later between fleets more than twice as large.) The British claimed 104 killed and 339 wounded, while the Dutch claimed 142 killed and 403 wounded.[2] There were private reports made that the Dutch casualties were actually much higher, possibly reachingt 1,100. The Holland sank the same night. Her flag, which was kept flying, was taken away by the Belle Poule, and carried to Admiral Parker.[3]

Although the Dutch celebrated the battle as victory, their fleet did not leave harbour again during the war and their merchant trade remained crippled. At least one convoy did make it to the Baltic, but it flew under Swedish flags and was accompanied by a Swedish frigate.[8]

Parker considered that he had not been properly equipped for his task, and insisted on resigning his command. The battle had no real impact on the general course of the war.